In re Account of Ira A. Kip

Decided: December 1, 1952.

IN THE MATTER OF THE ACCOUNT OF IRA A. KIP II AND ROBERT S. KEARNEY AS SUCCESSOR TRUSTEES UNDER A CERTAIN INDENTURE OF TRUST MADE BY KATHARINE FLOWER KIP (SUBSEQUENTLY KATHARINE FLOWER RUNYON), DATED DECEMBER 23, 1911

Colie, J.s.c.

Colie

The complaint seeks instructions in three respects hereinafter enumerated, and also asks for trustees' commissions on both corpus and income, and attorney's fees on the settling of the account which has heretofore been approved and settled.

In 1911 Katharine Flower Kip, a New Jersey resident, executed a trust indenture transferring $250,000 to trustees to hold the trust estate "during the lives of Ira A. Kip, Third and Nathalie Kip, and the survivor of them," and to pay the income to the donor for life, and upon her death to Ira A. Kip, Jr., her then husband, and upon the death of the donor and Ira A. Kip, Jr. to the surviving children of the donor, the issue of any deceased child to take the parent's share. Upon termination, the corpus was to be

distributed equally among the children of the donor surviving the donor, and to the lawful issue of a deceased child per stirpes. Ira A. Kip III and Nathalie Kip were the children of the donor. Nathalie Kip died in 1921 and there are surviving two children of the donor, Katharine Kip Brenneman and Ira A. Kip III. In 1918 the donor and Ira A. Kip, Jr. were divorced and the donor remarried.

In March 1920, Ira A. Kip, Jr., donor's former husband, and the donor, then Katharine F. Runyon, executed a written instrument referring to the trust indenture of 1911. By it, Ira A. Kip, Jr. assigned and transferred to their four children, share and share alike, or to the issue of any deceased child per stirpes , the income that might accrue and become payable to him under the trust fund created by the 1911 instrument.

On August 17, 1951 the donor died a resident of New Jersey, leaving her surviving Ira A. Kip III and Katharine Kip Brenneman, and also six grandchildren and three great-grandchildren. None of the children of the donor who predeceased her left issue surviving. The present trustees are Robert S. Kearney and Ira A. Kip III. (Said Ira A. Kip III is now known as Ira A. Kip II.)

In 1943 in the Supreme Court of the State of New York the accounts of the trustees from December 23, 1911 through September 30, 1941 were settled and approved. The affidavit of Robert S. Kearney filed in this cause indicates that he and Ira A. Kip III then received as corpus commissions $2,077.48. The trustees have also paid themselves $1,989.24 as an advance on commissions that they expect to get on the present proceeding. The account of the present trustees to August 17, 1951 shows a balance of corpus amounting to $134,215.14 and the request is for commissions at 5% on the first $50,000 and 3% on the balance, amounting, in all, to $5,026.45. The trustees credit against this last amount $2,077.48 received under the judgment of the New York court and $1,989.24 advanced to them, so that the amount that they now request is $959.73. They also seek

commissions on $108,102.75 of income, amounting to $5,405.14, $5,108.91 of which they have already received, leaving a balance due the trustees, if allowed, of $296.23 commissions on income.

The brief filed in this cause by counsel for the trustees states the questions as follows:

"(a) Under a proper construction of Article First of the 1911 deed of trust and of the instrument of assignment dated March 9, 1920, and by reason of the death of the donor of the trust, have the life interests of Ira A. Kip II and of Katharine Kip Brenneman merged with the remainder interests of said individuals in their capacity as remaindermen under said deed of trust?

(b) Under a proper construction and application of the instrument of assignment dated March 9, 1920, was the entire interest which Ira A. Kip, Jr. (the divorced husband of the donor) had received under the 1911 deed of trust, transferred and assigned by said instrument of assignment to Katharine Kip Brenneman and Ira A. Kip II, being the only children of his marriage with the donor who ultimately survived the donor?

(c) Are the trustees authorized under a proper construction of Article First of the 1911 deed of trust and under the pertinent New Jersey laws and the general equity powers of this Court, to continue to hold, as part of the trust assets under said 1911 deed of trust, the fee title to certain improved real estate in New York ...

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